Canadian Government Approves Chinese Oil Company Bid For Nexen

By Dimitra DeFotis

China’s Cnooc is a step closer to a big play in the North American energy patch with a green light, declared by the Canadian government Friday evening, on its $15 billion bid for Canadian oil-and-gas explorer Nexen.

Nexen (NXY) shares surged more than 14% after hours, having closed down 6.6% Friday. Shareholders have approved the acquisition, but Nexen still needs U.S. and British government approval to complete the deal since it has properties in both places, according to Dow Jones Newswires’ Paul Vieira, who added:

“Friday’s decision was Cnooc’s biggest-and most closely watched-hurdle. Canada has long welcomed big foreign investment to help it develop its energy and mining resources.”

The deal is “likely to be of net benefit to Canada,” according to Canada’s Industry Minister Christian Paradis, as quoted by MarketWatch here.

Canada’s currency should be a beneficiary, given the financing demands of such a large acquisition; this deal is the fifth-largest foreign acquisition of a Canadian company ever according to Dealogic, and this Dow Jones Newswires report.

Cnooc (CEO) is one of the largest independent oil and gas exploration and production companies in the world. There’s more on the company on its English-language website. Nexen is a big player in Canada’s oil sands, but it also has shale and conventional exploration assets.

Asian governments and companies are eager to secure future energy reserves as their populations boom. The Canadian government also announced that it approved the purchase of Progress Energy Resources by Malaysia’s state-owned oil-and-gas company. The Petronas (Petroliam Nasional Bhd) offer over the summer represented a 77% premium to Progress’ then-price; the $5.2 billion deal will mean natural gas exports to Asia. More on that from Bloomberg here.

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There are 3 comments

DECEMBER 7, 2012 6:25 P.M.

Herry69 wrote:

this is a black day for canada ! this IS the beginning of the end of canada as we know it. this is a 100% fact ! harper gave OUR manufacturing industry to china. that's why there's hardly any jobs. dah !!! and the freakin' loser sells the farm to china ! who side is this id-iot on ? THIS IS TREASON ! and with canada's so-called mickey mouse justice system, harper would go to jail for two weeks, come out, suck some c--k and be eligble to run for a political agenda again. for treason ?! and you why there are so many wars kicking around these days. simple. really stu-pid politicians making really stu-pid decisions. all because realy stu-pid people voted for these really stu-pid id-iots to lead them. conclusion: 90% of the human race are fools !

DECEMBER 7, 2012 10:22 P.M.

jz wrote:

don't understand why any Canadian would object to the deal, there are not enough Chinese to move the oil wells to China.

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